Purchasing a new build home can be an exciting journey, offering the chance to own a property that’s never been lived in before. However, like any significant investment, it’s essential to go in with your eyes wide open.
In this guide, we’ll explore the nuances of buying a new build, from understanding potential risks to considering essential factors that will ensure your new home meets your expectations and needs.
Are there any risks with buying a new build home?
While new build homes come with the allure of modern features and the absence of a property chain, they’re not without their risks. Issues such as delays in construction, snagging problems (minor faults or issues), and potentially lower bargaining power on price are common concerns.
Some buyers may find their new home has depreciated in value when it comes time to sell, especially if they bought during a peak market. It’s crucial to weigh these factors against the benefits of owning a brand new property.
Should I buy a new build home?
Deciding whether to buy a new build home involves weighing the pros and cons in relation to your personal and financial circumstances. New builds offer modern amenities, energy efficiency, and often a simpler buying process without a property chain. However, the premium for a new home, potential delays, and the risk of initial depreciation are important considerations.
Reflect on what’s most important to you, such as the value of having a warranty, the appeal of customisation options, and your long-term investment goals. Consulting with a mortgage advisor can also provide valuable insights tailored to your situation.
Things to consider when buying a new build home
Here are 15 things to consider when buying a new build home:
Warranty and insurance
When purchasing a new build home, the warranty and insurance are fundamental aspects that provide peace of mind. Typically, new builds come with a 10-year warranty from providers like the National House Building Council (NHBC), which covers structural defects. However, warranties can vary, so it’s essential to understand the specifics of what’s covered.
For example, the first two years usually cover most defects related to the construction quality, while the remaining years cover major structural issues. Additionally, developers might offer insurance policies for appliances and other elements. It’s crucial to review these documents thoroughly to know what protections are in place for your new home and to ensure you’re fully aware of the process for making a claim if needed.
The build quality of a new home can significantly impact your satisfaction and the property’s longevity. Researching the developer’s reputation and visiting their previous projects can provide valuable insights into the construction standards you can expect.
When visiting other developments, pay attention to the materials used, the finishing touches, and the overall design. Speaking to current residents about their experiences can also reveal any issues they’ve faced and how effectively the developer has addressed them. This research will help you set realistic expectations and potentially avoid developers with a history of poor build quality.
A snagging list is a compilation of defects or unfinished work in a new build property. Identifying these issues before moving in is crucial, as it’s easier to have them resolved while the property is still under the developer’s responsibility.
Although it’s possible to create a snagging list yourself, hiring a professional snagging inspector is highly recommended. These specialists have a keen eye for detail and can spot problems that might not be immediately apparent, ensuring that your list is comprehensive.
Once compiled, this list should be presented to the developer to be addressed before or shortly after you move in, ensuring your new home meets your expectations from day one.
Location and development plans
The location of your new build home and any future development plans in the area are critical factors that can influence your living experience and the property’s value. Researching the local area for amenities such as shops, schools, and parks can provide a sense of the community and lifestyle you’ll be joining.
It’s also wise to look into any planned developments or construction projects, as these can affect your view, privacy, and the overall desirability of the location. Additionally, consider the local council’s long-term plans, as improvements in infrastructure or the addition of community facilities can enhance the area’s appeal and potentially increase your home’s value.
The Energy Performance Certificate (EPC) rates a property’s energy efficiency, with new builds often achieving high ratings due to modern construction standards and regulations. A higher EPC rating not only means lower energy bills but also a smaller carbon footprint, making your home more environmentally friendly.
Factors contributing to a high EPC rating include insulation quality, double-glazed windows, and efficient heating systems. It’s important to check the EPC rating of your prospective new build to understand its energy performance and anticipate future costs.
Estate management fees
Many new build developments include communal areas or facilities, the upkeep of which is covered by estate management fees. These fees can vary widely depending on the development’s size and the services provided, such as gardening, cleaning, and maintenance of communal spaces.
Before committing to a purchase, it’s essential to understand these fees, what they cover, and how they might increase over time. This will help you budget accordingly and avoid unexpected costs in the future.
Deals and incentives
Developers often offer deals or incentives to attract buyers to new build properties. These can range from covering legal fees or stamp duty to offering upgrades within the home. While these deals can provide significant savings, it’s important to evaluate them carefully.
Some incentives, like furniture packs, may not be as valuable as a direct discount on the purchase price. Always consider the long-term value of these incentives and negotiate to ensure you’re getting the best possible deal.
The layout of your new build home should suit your lifestyle and needs both now and in the future. Consider the flow between rooms, the size of living spaces, and practical aspects like storage and natural light.
The orientation of the home can also affect energy efficiency and enjoyment of outdoor spaces. Many developers offer show homes where you can experience the layout first-hand, helping you make an informed decision about whether a particular model fits your requirements.
Considering your new build home as a long-term investment requires evaluating the area’s growth potential and how the property fits within the broader market trends. Research the local housing market, including historical price trends and future development plans, to gauge potential appreciation.
A home in a growing community with planned infrastructure improvements is likely to be a sound investment. However, be mindful of market fluctuations and the premium often associated with new builds, as these factors can influence your home’s value over time.
Part exchange and chain status
Part exchange programs can offer a streamlined process for moving into a new build by allowing you to trade in your current home as part of the deal. This can be particularly attractive for avoiding the property chain and reducing selling stress.
However, it’s important to ensure that the part exchange offer represents fair market value for your existing property. Comparing the offer with independent valuations and considering the convenience versus potential financial implications will help you make an informed decision.
One of the appealing aspects of buying a new build is the ability to customise your home before construction is completed. Developers may offer options for finishes, fittings, and sometimes more significant layout changes.
While customisation allows you to personalise your space, it’s important to understand the costs involved and the impact on your budget. Prioritise changes that will enhance your quality of life or the property’s value, and be wary of over-customisation that could affect future saleability.
The deposit requirements for new builds can differ from those of existing homes, often influenced by the developer’s incentives and the mortgage lender’s criteria. Understanding these requirements is crucial for budgeting and securing financing.
Some developers may offer schemes to help buyers with smaller deposits, but it’s important to consider the long-term implications on mortgage payments and interest rates. Consulting with a mortgage advisor can provide clarity on the best financial strategy for your circumstances.
After moving into a new build, you may encounter issues or defects that need addressing. Knowing the developer’s post-completion support policy is essential for a smooth transition into your new home.
This includes how to report issues, the timeline for repairs, and any guarantees on workmanship. A developer with a strong commitment to customer service will offer reassurance and support, ensuring any problems are resolved promptly and to your satisfaction.
The availability and quality of transport links can significantly impact your daily life and the property’s desirability. Easy access to public transport, major roads, and airports contributes to convenience and can enhance the value of your home.
When considering a new build, evaluate the current transport infrastructure and any planned improvements, as these can influence your decision and future investment returns.
Finally, the reputation of the developer is a critical factor in your decision to purchase a new build home. Researching their track record for quality, reliability, and customer satisfaction can provide valuable insights.
Look for reviews, testimonials, and any industry awards or recognitions. A reputable developer not only ensures a quality home but also peace of mind that any issues will be addressed efficiently and effectively.
Contact Sett Mortgages for new build support
Navigating the purchase of a new build home can be complex, but you don’t have to do it alone. At Sett Mortgages, we specialise in helping buyers through the process, offering expert advice tailored to your unique situation.
Whether you’re concerned about mortgage options, developer incentives, or ensuring your new home is a sound investment, our team is here to support you every step of the way. Contact us today to learn more.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.